SDVOSB or VOSB?

TITAN University was recently awarded the status of Service-Disabled Veteran-Owned Small Business (SDVOSB) by the Department of Veteran’s Affairs. If you are a veteran, own a business, and want to compete/bid on government contracts, then applying for Veteran-Owned Small Business (VOSB) or Service-Disabled Veteran-Owned Small Business (SDVOSB) is a good route to take. For one, the Department of Veteran’s Affairs (VA) only awards contracts to Veteran-Owned Businesses. This allows the veteran business to compete with a much smaller pool of contractors than if the bid were to just go out to the general public.  

Veteran Owned Businesses are Encouraged to Bid

Many other government agencies such as U.S. Army Corp of Engineers (USACE), Naval Facilities Engineering Systems Command (NAVFAC), and General Services Administration (GSA) seek out Veteran-Owned businesses in their solicitations. They set aside money in many of their Requests for Proposals (RFP) for small businesses, and more specifically, veteran-owned businesses. It is part of a government program to set aside funds to help small businesses grow. 

Joint Venture Loop-Hole?

For the most part, the program has been successful. However, there are some companies that exploit the program for profits. Many large businesses are unable to bid on the projects that are set aside for small business, and many small businesses do not really have the experience, resources, or desire to pursue government contracts. In this instance, many Joint Ventures are formed between a large business and the small business. This creates a loop hole where the money is being paid to the small business, but most of the funds still make it’s way to the large business. The small business then takes a percentage off the top. Ultimately, in this instance, the money is wasted by the government, and would have spent less money had they simply awarded the large business the contract. The small business just takes the money and does it again. This is a rare instance of how the program is ineffective in promoting economic growth to small businesses. 

Subcontracting Plan

Some projects are too large for small businesses. So the contract must be awarded to a larger contractor with more experience and resources. However, even with large contracts, the federal government ensures the large contractor develops a Subcontracting Plan and a Small Business Participation Plan. Within the solicitation, there are certain small business participation goals to be achieved by the large contractor, in which they must set money aside for small businesses. So, participating in the small business program by the SBA will allow you to compete with projects of all shapes and sizes.